Peter Phillips Workshop

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Today, I was fortunate to have had the privilege of attending the Workshop on Econometric Theory and Methodology at Monash University’s Department of Econometrics and Business Statistics. The guest of honour was the most esteemed econometrician, Professor Peter C B Phillips. It was fantastic to see a number of presenters throughout the day do justice to Phillips’ achievements via their own respective works – a wonderful event. Bravo Monash and Peter Phillips!

Busting the Brazil ‘Myth’

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[Cross-posted at: Football Perspectives, 25 September 2012]

Last Wednesday in Goiânia, Brazil defeated arch-nemesis Argentina 2-1 in a friendly match to square the all-time head-to-head ledger between the two giants of CONMEBOL at 35 wins apiece from their 94 meetings dating back to 1914.

This was much to my chagrin, as my in-laws are Argentine. Could it be that Juan Manuel Martínez’s sublime 20th minute opener (after a 12 successive-pass move) was a clear tactical mistake, insofar that it ‘awoke the sleeping giant’?

Brazil, urged on by the 40,000-strong fanatical home crowd, attacked furiously from the re-start and equalised only six minutes later, and eventually won by the odd goal in three with a Neymar penalty at the death.

Realistically, any rational individual would have to think that the answer is a resounding ‘no’ – after all, why would any professional footballer deliberately spurn the opportunity to score a goal when they have the chance? However, while doing this would appear to be totally irrational on face value, an old ‘myth’ about Brazil in football – if believed – would provide such a reason.

The myth

Formally, the myth that it is that when playing against Brazil, it is unwise tactically to score early in the game. The intuition here is that scoring early merely serves to make the Brazilian eleven angry, providing them with extra incentive to attack furiously and score repeatedly for the remainder of the game, thus handing a football ‘lesson’ to the opposition who dared to go 1-0 up earlier.

As can be imagined, the myth probably owes its existence to a small number of identifiable (and famous) cases where this chain of competitive behaviours played out. In the final of the 1958 World Cup, hosts Sweden went ahead after four minutes, only to have Brazil open the floodgates thereafter; winning 5-2 (and a brace from 17-year old Pelé). Four years later in Santiago, the sense of déjà vu was palpable in the final, when Czechoslovakia scored on 15 minutes, with Brazil equalising two minutes later and winning 3-1. There have also been numerous other such instances.

While it may seem at first to be a frivolous exercise in sports science, it is nevertheless a useful applied microeconomic analogy to a specific (but common) industrial setting. Namely, a finite-length bilateral (but asymmetric) industry contest, in which substantiation of the myth would provide evidence that an underdog over-exerts effort (relative to optimal) early in the contest against a more favoured opponent, and that analogously the favourite under-exerts effort early. Such a conclusion would refute the theoretical findings (that the underdog has an incentive to commit effort early) of Baik and Shogren’s seminal 1992 piece in American Economic Review, and is (kind of) more consistent with Avinash Dixit’s earlier 1987 paper (where the ordering of moves is not endogenised), also in AER.

What does the data tell us?

For the prospective opponent that takes heed of the myth, perhaps the optimal implied strategy is to keep the game at 0-0 until the final few minutes and then score, circumventing Brazil’s scope to react. A casual look at the data suggests that there may be something to this – of Brazil’s 306 ‘A’ international matches since 8 August 1993 (when FIFA rankings were published), Brazil has lost 40 (in regulation time), of which 15 produced a 0-1 score line, and in a disproportionate six out of these 15, the opponent scored the winner in the final 10 minutes (this compares to only four out of Brazil’s 37 victories by 1-0 coming via a goal after the 80th minute), and meanwhile there have been 26 scoreless draws.

One still believed the myth to be an empirical issue. Using a sample of these matches, I set out to compare (only) Brazil’s scoring outcomes, after various ‘early’ cut-offs of 15, 25 and 35 minutes, in a treatment group of matches in which they concede an early goal, to a control group in which the opponent does not score early. On the basis of mean scoring rates (goals divided by minutes played), Brazil scored more frequently after the early cut-offs in the control games, significantly so for the latter cut-offs, in direct contrast to the myth.

Controlling for match-specific factors

However, the comparison of scoring rates did not account for various important match-specific factors that could be driving the results. When ordered probit models were estimated to control for these factors, the point estimate of the treatment game dummy variable became positive – the correct sign required for the myth to hold (except for the 35-minute minute cut-off) – but was insignificant. Here, factors such as home-ground advantage, competitive balance of the teams (according to FIFA ranks) and context of the match (friendly, qualifier, group/knock-out stage of tournament), all became important.

Finally, matches in which Brazil themselves score early before the opponent were removed from the sample, so as to make a cleaner comparison of whether the opponent is either at 0-0 at the early cut-off or 1-0 at/before it. Here, the dummy variable of interest (for the 25-minute cut-off) actually became very close to substantiating the myth, with a p-value close to 10%.

However, the hypothesis was framed in such a way to give the myth ‘every possible chance’ to hold, hence the ruling was that the myth is, to phrase television’s Adam Savage and Jamie Hyneman, ‘totally busted’!

Further reading

Baik, K. H. and Shogren, J. F. (1992), “Strategic Behavior in Contests: Comment”, American Economic Review, 82 (1), 359-362.

Dixit, A. (1987), “Strategic Behavior in Contests”, American Economic Review, 77 (5), 891-898.

Lenten, L. J. A. (2012), “The Underdog Should Always Fire the First Salvo against Brazil“, Applied Economics Letters, 19 (10), 935-938.

Appearance on ‘Stay Tuned’

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I appeared on the ABC3 teen-oriented music program Stay Tuned on September 14, discussing fame in the music industry.

WATCH ON YouTube

Liam Lenten on the teen-music variety show “Stay Tuned” on ABC3 (season 2, episode 17), using elements of his study (with Jordi McKenzie, University of Sydney) on determinants of JJJ Hottest 100 success, to help hosts Joel Phillips and Nicole Singh answer the question: “Who is the Most Famous Person in the Music Industry?”.

Interview with La Trobe Vice-Chancellor, Professor John Dewar

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I recently recorded a video (on 23 August) with my boss, discussing a selection of important issues and challenges facing LTU.

WATCH ON YouTube.

The Vice-Chancellor of La Trobe University, Professor John Dewar, is interviewed by Liam Lenten (Senior Lecturer, School of Economics) about such issues as: internal policy initiatives; workload management systems; university initiatives for sport; expansion of student numbers; and university rankings and their implications.

Recent Appearance on ABC Brisbane News

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I recently appeared on the ABC nightly Brisbane News (6 September), talking about bidding for NRL State of Origin hosting rights.

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ABC1 (Brisbane) Nightly News Bulletin: Liam Lenten offers opinion on reports of ARL decision to sell hosting rights of one State of Origin game every two years to highest bidder (even if not Sydney or Brisbane).

Football Penalties BEFORE Extra-Time? Dr Jan Libich and I Assess the Proposal

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I recently recorded a video (description below) that follows from a previous post on 16 July 2010.

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FIFA President Sepp Blatter called penalty shootouts in football (soccer) a “tragedy”. Dr Jan Libich interviews me about our study (also co-authored by Dr Petr Stehlik) assessing an alternative rule: to stage the penalty shootout BEFORE (rather than after) extra-time. The study can be downloaded at www.janlibich.com/penalties.pdf. This video was recorded on 31 August 2012.

My Research Project Description: Short Video

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As part of the La Trobe Research series, on 17 May, I recorded a short video (description below) discussing a current research project of mine: “Unbalanced Scheduling Systems and Demand for Professional Sport” (with Jordi McKenzie, University of Sydney).

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Researchers of La Trobe University are asked three questions, giving a glimpse into the wide range of research conducted at La Trobe. Researchers are asked: In the simplest terms, please explain your research hypothesis? What is the key outcome you hope you achieve? How will this outcome impact society or the community?

Hypotheticals under Arguably Better Systems

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[Archived from: The Sports Economist, 3 September 2012]

The Australian Football League (AFL) finals series (or playoffs in the US/Canadian lingo) kicks off this weekend, with betting markets indicating that the field of eight is more open than in most recent years. At the business end of the season, it is always worth considering how things would be different under alternative systems used to rank teams at the conclusion of the home-and-away (regular) season.

One possibility here is if the AFL used a ‘bonus points’ system analogous to that used in some Rugby (Union) competitions (see an earlier post). Niven Winchester (MIT) and I estimated a theoretical bonus point system, ‘optimal’ in the sense of being able to reveal the truly best teams. As opposed to the current system of four points for a win, two each for a draw (infrequent) and zero for a loss; our results indicated a preferred allocation of four league points for a win, three points for a draw, two points for winning by 27 or more and two points for losing by 26 or less (however, the partition could instead be altered to let’s say 24 points (four goals) to make it more interpretable to fans).

The 2012 ladder under a bonus point system does produce a few notable differences – Collingwood would have finished 7th instead of 4th, giving them an elimination final against North Melbourne, and handing Geelong the double-chance and a sumptuous qualifying (non-elimination) final against minor premiers Hawthorn. West Coast and North Melbourne are also ranked above Collingwood under the alternative system due to these teams picking up a large number of bonus points, even though they won fewer games than Collingwood. Additionally, a bonus point system point system would have resulted in the ‘dream’ Western-derby elimination final in Perth between West Coast and Fremantle. Outside the final eight, Richmond would have been the only significant mover, climbing from 12th to 9th, forcing each of the three teams above them down a spot.

It’s not all bad for Collingwood fans, however. In the original paper (published in Economic Papers in 2010), when we used our alternative system to backtrack over our original 12-year sample, we found Collingwood would actually have fared best overall with the bonus points system, finishing significantly better in five seasons, while finishing significantly worse only on one other occasion.  For the other teams, it made a significant difference either way in only two seasons on average. Niven, along with Ray Stefani (California State, Long Beach) have since used similar methodology to estimate a bonus points system for the NFL (this paper is now forthcoming in Applied Economics). Perhaps the NRL (Rugby League) should be next on the research agenda.

The other hypothetical I typically like to consider is the application of a correction accounting for the strength of schedule problem – I tackled this one for AFL data in Economic Modelling last year. If the ladder was based on adjusted wins, Collingwood would actually leap from 4th to 2nd, forcing both Adelaide and Sydney down a spot, and giving both themselves and Hawthorn easier fixtures in Melbourne against interstate visiting sides. All other rankings were unchanged here, and standard within-season competitive balance measures would have been higher (indicative of a truly less-balanced competition than realised; this owing to most of the top teams playing each other twice, mutatis mutandis for most of the bottom teams).

If nothing else, these counterfactuals help reinforce how sensitive standings can be to alterations in the criteria used to rank teams, holding fixed the results of all matches in the season. What the implications are, however, is another matter – ask 10 Sports Economists this question and you may get 10 completely different answers.

Schadenfreude in Duoplolistic Pro-Sports Team Cities

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[Archived from: The Sports Economist, 2 September 2012]

While ‘playing around with’ (for want of a better way of putting it) some Australian AFL (Aussie Rules) and NRL (Rugby League) data, something interesting emerged.  Below are win-attendance correlations for the Brisbane-based NRL (Broncos) and AFL (Lions) teams over the last decade excluding this year (2003-2011), as well as the cross-correlations.  Notice that the Lions get substantially more bums on seats when they’re doing well, whereas for the Broncos attendance seems to be invariant to wins.  That the former conforms to the standard story, while the latter does not, can arguably be explained by the combination of Rugby League being the more traditional winter football code in Queensland and Australian Rules being the relative newcomer to that market, and the related differences in the market ‘maturity’ of both sports (despite that both teams were founded almost at the same time in the 1980s). The obvious caveat to this analysis is the small sample size.

  • Broncos Win/Broncos Att.: -1.2%
  • Lions Win/Lions Att.           : +73.4%
  • Broncos Win/Lions Att.      : -35.8%
  • Lions Win/Broncos Att.      : -55.4%

However, the more striking result is that the Lions (Broncos) doing well is associated with Broncos (Lions) attendances being lower!  Could it be that AFL and NRL demand are far more substitutable than we thought previously?  My intuition makes me doubt that pricing could be responsible here, as pricing in both leagues is highly uniform between matches.  Anyway, Brisbane is a natural candidate for this type of exercise as they are have both been local (notwithstanding Gold Coast) monopolies in their respective leagues over that entire sample (though a second NRL team, the Bombers, are likely to be added by 2015) and the seasons overlap almost identically.  This reinforces any schadenfreudian behavior of these teams (in a business sense), that is often speculated, despite what spokespeople from those teams and leagues say. The data provides a similar picture if we go back further years, but other sporadic factors prior to 2003 interfere with the figures (Lang Park redevelopment, Super League War, Bears/Fitzroy merger, use of Carrara Oval, etc.).

Can any North American pro-sports experts out there provide any anecdotes to help support or refute this casual empirical story? As best as I can ascertain, the NBA and NHL are the best bilateral candidates to tease out such possible behaviour (though ice hockey and basketball are admittedly less substitutable appeal-wise than the two winter codes in Australia), but I cannot identify any US/Canadian city in 2012 with two (or even more) pro-sports teams from only each of these leagues. Was there any city that at any time in history did have only each of an NBA and NHL team (without having an NFL or MLB team)? If so, why was that status quo ultimately unsustainable? Any other thoughts on this?